Kagera Sugar Limited, a Tanzanian company, recently announced that it has acquired the assets of Tongaat Hulett Limited (THL), an agribusiness establishment based in South Africa.
This acquisition is a key element of Kagera Sugar Limited's strategic growth plan on the African continent. According to THL, the acquisition of the sugar company's South African assets encompasses more than just its South African holdings. It also includes the group's investments in Mozambique, Zimbabwe and Botswana.
Financial details of the acquisition were not disclosed by Kagera Sugar CEO Nassor Seif. However, he confirmed that the purchase is a deliberate move towards the company's expansion and its objective of becoming one of the main sugar producers in Africa.
Seif said the company's operations in Southern Africa will benefit from the successful core values that have been implemented across the group's companies. This extension will be advantageous for workers, producers and the region's economy as a whole.
According to Seif, the company has made a firm commitment to invest a substantial amount of resources in modernizing its factories. This investment will involve the expansion and improvement of existing facilities, with the aim of increasing production and operational efficiency. Located in the northwest region of Tanzania, Kagera Sugar Limited (Kagera) is a company specializing in sugar production.
This entity belongs to a conglomerate of companies that are the main sugar producers in Tanzania. Its possessions span Tanzania, the Middle East and the Democratic Republic of the Congo.
On July 21, THL issued a statement announcing that the Tanzanian producer emerged victorious in the bidding process, which saw more than 70 entities express interest. The list was later whittled down to eight by Tongaat Hulett business rescue professionals.
Last year in July, Tongaat Hulett Limited, which was previously listed on the Johannesburg Stock Exchange (JSE), was suspended from trading. The reason for the suspension was the company's failure to publish the 2022 interim financial statements and the same year's audited financial statements within the expected timeline.
According to the official statement released by the company, the suspension of operations does not have any significant effect on the organization's financial stability or day-to-day business activity.
The BRPs selected Kagera Sugar as their strategic equity partner (SEP) based on the report in The Citizen, an online newspaper. Their reasoning is that they have faith in the group's financial stability and strong track record, as well as its ability to adjust and evolve as necessary.
“According to its statement, the involvement of Tanzania and the complementary sugar assets of the Democratic Republic of the Congo provides pertinent technical and operational expertise to enhance the recovery of THL's sugar assets in South Africa.
Their statement stated that sugar refineries located in Oman and Bahrain would provide access to cutting-edge technologies and expertise to increase productivity.
The Tongaat Hulett group is responsible for operating sugar factories located in Xinavane, in the southern province of Maputo, and in Mafambisse, located in the central province of Sofala, in Mozambique. \
Tongaat, operating from two factories, is responsible for approximately 60% of the country's sugar production. Along with sourcing from large commercial suppliers, the corporation also established a program to promote sugarcane cultivation in nearby communities.
